SUN ON THE SNOW BELT

CHICAGO TRIBUNE

Like a voice from the graveyard, sounds of industrial stirring are heard among the silent smokestacks of the northern United States. A recent Tribune series by R.C. Longworth reported that the industrial future is taking shape, not only in New England, where the high-tech revolution is in full swing, but in other areas, such as the Pittsburgh and Detroit regions, where hope is replacing the hopelessness of the past decade.

The Northern states, once the foundry of the nation, are known now as the Rust Belt or the Snow Belt, in invidious comparison to the supposedly booming Sun Belt. The region stretches from New England to Chicago. As its industrial collapse began in the East and moved west to Chicago, so the recovery seems to follow the sun, starting on Route 128 around Boston and moving west. Chicago now is assessing the damage, asking the questions, weighing the options--all steps that other cities and states took before us. The new industrialization will arrive here soon, and it is instructive to look at others` experience, as an indication of what we can expect.

The pattern is that there is almost no pattern. High-tech, spawned by the fecund brain factory of MIT, built the cornerstone of the Massachusetts renaissance. High-tech industries per se, the ones that make the chips and computers, employ barely 10 per cent of the local work force, yet spin off so many other industries and services that depend on their expertise that the state luxuriates in a 3.7 per cent unemployment rate.

While Massachusetts exported its textile industry and built something new, Michigan`s revival, still in its early stages, is based solidly on the auto industry, the once and future focus of its economy. Tennessee may be getting the big new projects, but the old Michigan factories are rolling again. They employ more robots and fewer people now but, as in Massachusetts, are spinning off suppliers, many of them high-tech companies, that employ thousands of persons.

In Pittsburgh, the steel industry is quietly dying, but the city touts itself, with some justification, as the future software capital of the world. Smaller cities, by sharing services and courting government grants, are creating the atmosphere that lures in companies.

In some places, like Massachusetts, state government has played a relatively small role so far and most of the new companies are non-unionized. In Michigan, state government has played a vital part: so have progressive unions such as the United Autoworkers. In Pittsburgh, a 40-year alliance between the city government and business, expressed through a group of lively non-profit organizations, has propelled that city`s rebirth.

Contrary to the popular wisdom, high taxes and high wage structures haven`t prevented investment in places like Michigan and Minnesota. Despite this, North Carolina has used low taxes and low wages as a successful lure for mature high-tech industries. Other Sun Belt states, with nothing to offer but cheapness, are losing industry now as fast as they gained it in the 1960s and 1970s: if low wages are the only factor, a company might as well be in Mexico. The only constant to industrial growth seems to be education. In Massachusetts and Pittsburgh, the big universities like MIT and Carnegie-Mellon have deliberately plugged themselves into the local economies, ignoring the old strictures against the contamination of commercialism. In other areas, committed community colleges have provided the retraining that the new industrial age demands. Everywhere, good secondary schools are vital: in Pittsburgh, for instance, a 10-year partnership between business and the schools is finally paying off.

If the new industrialization is encouraging, it also has its limits, and they are sobering for Chicago. Most job creation is in rural areas or suburbs, bypassing inner cities and the old industrial neighborhoods. Those displaced by the collapse of old industry are not benefitting from the rise of new industry. Many new companies, being small and mobile, seem to be locating specifically to avoid both blacks and unions. Even in Massachusetts, only about one-fourth of the old mill towns benefit from the boom. The ghettoes of Detroit and the old steelmaking areas up the river from Pittsburgh are as depressed as ever.

The lesson in all this is that Chicago, like the success stories so far, should play to its strengths, should encourage investment with attractive tax and regulatory policies, and should press its universities to join in the economic revival. It is likely that this revival will take place in the suburbs: a major role for government, both city and state, is to figure out how the citizens of Chicago can take advantage of the jobs, money and tax revenues that the reindustrialization of the Chicago area will create.